New Anti-Money Laundering legislation voted through the European Parliament today aims to shine a light on areas where criminals launder dirty money, but cut the red tape that and inflexibility of the current laws in place, Timothy Kirkhope MEP, one of the parliament's lead members on the new law, said this afternoon.

The new EU directive aims to bring law up to date with technological developments that make it much harder to link the cash to a crime such as trafficking, terrorism or corruption. It will work on the basis of assessing risks, so that the majority of people who transfer money or set up businesses are hardly affected by it. However, it will also shine a light on those using fake companies to deposit money, or disguising assets; and it will require more information to accompany the transfer of funds, in line with new international standards.

In October 2013, UK Prime Minister David Cameron committed to making public a new central register of company beneficial ownership (those people who enjoy the benefits of ownership of an asset or company, even if they do not nominally own the asset). He said: "we need to shine a spotlight on who owns what and where money is really flowing." The legislation adopted today seeks to make information on beneficial ownership more readily available. However, Mr Kirkhope was able to secure an amendment in committee that tackles concerns about intrusion into trusts and wills. The amended directive now specifically prevents sensitive information from being disclosed, unless there is a serious risk of the trust being abused for money laundering purposes. He also tabled a further amendment to the parliamentary vote today that would further clarify the need for trusts and wills to remain private.

Mr Kirkhope, drafted the parliament's position on strengthening rules regarding information that accompanies all bank and wire transfers, to fill the gaps and loopholes that can be used by criminals and terrorists to launder funds. Future transfers would require some basic information on the payee to be transmitted alongside the transfer, and providers would be required to establish risk-based procedures to determine when necessary to execute or reject a transfer, or to demand more information if foul play is suspected.

Speaking after today's vote, Mr Kirkhope, European Conservatives and Reformists group Justice and Home Affairs spokesman, said:

"Current money laundering law has become so inflexible and full of loopholes that criminals and terrorists have been able to find their way around it, yet people and businesses have found themselves hampered by it. We need a system that assesses risks, rather than a tick-box culture.

"The new EU directive will shine a light on shadowy areas where money launderers operate by requiring more information to be published about who actually owns business assets, and whether financial transfers are deemed high risk. Previous law took a blanket approach to money laundering rules, which meant for example somebody transferring significant sums of money or buying a car would find themselves hampered by money laundering law. By updating the law, we are seeking to lift the restrictions on the majority of people, but come down harder on those seeking to hide money in shell companies.

"There have been justified concerns about how trusts and wills could be affected by this law. Such sensitive information should not be made public, but we also must tackle the use of trusts as a means of laundering money. That is why I have been able to change the proposal so that only those trusts deemed most at risk will have any information made public, so that the vast majority of trusts will be able to keep this information private until after their death. This proposal must still be agreed between the parliament and national governments before it can become law and I will use that negotiation as an opportunity to further ensure the privacy of hard working people's trusts and wills.

"Money laundering costs the global economy around a trillion Pounds every year. It is helping to finance global criminals and terror, so a robust global response is needed."